VeriFone Systems Reports 1Q Loss

By Salon Staff

Published March 5, 2012 11:18PM (EST)

SAN JOSE, Calif. (AP) — Electronic payment company VeriFone Systems Inc. said Monday that it lost money during its fiscal first quarter as rising costs wiped out gains from higher revenue. But the quarterly results and full-year forecast beat Wall Street expectations and shares rose in aftermarket trading.

VeriFone Systems makes electronic systems that retailers use to accept payments. The company's systems can take payment from a variety of means, from credit cards to certain mobile phones.

The company announced an agreement Monday that will allow it to accept payments from a mobile phone program that lets consumers pay for goods using their phone rather than a debit card.

As the ways of making electronic payments increase, the company said it expects its 2012 net income to be higher than analysts expect. Verifone estimates it will earn adjusted net income between $2.60 per share and $2.66 per share. Analysts forecast $2.59 per share, according to FactSet.

During the current quarter, the company expects to earn adjusted net income of 59 or 60 cents per share. Analysts expect 60 cents per share.

VeriFone said that during the quarter ended Jan. 31 it had a net loss of $3.1 million, or 3 cents per share, compared to net income of $32 million, or 35 cents per share, during the same period a year before. Revenue was $420 million, up from $411 million during the prior-year period.

The company also reported adjusted net income, excluding one-time items like acquisition costs, of 58 cents per share, compared to an adjusted 43 cents per share in the same period a year before.

The results beat Wall Street forecasts for adjusted net income of 52 cents per share on revenue of $417.8 million, according to FactSet.

VeriFone Systems said costs jumped 53 percent from the same period last year to $262.9 million. Cost for services doubled.

Revenue in 2012 could be boosted by an agreement VeriFone Systems announced Monday. The company said it signed a deal to accept payments through a mobile phone-based system called Isis, but it did not disclose specific terms of the agreement.

Isis is a joint venture between AT&T Mobility, T-Mobile USA and Verizon Wireless. It lets consumers pay for items through a mobile application called Isis Mobile Commerce Application. VeriFone Systems said it will accept Isis payments in the test markets of Salt Lake City and Austin, Texas.

Shares of VeriFone Systems rose 40 cents to $46.95 in after-hours trading. During the regular session shares fell $1.15, or 2.4 percent, to close at $46.55.

Salon Staff

MORE FROM Salon Staff

Related Topics ------------------------------------------